2 articles for you to read - Try the link first, and then use the second one after you read it -
Must I Keep Windows.old?
How do I remove the Windows.old folder?
Before you use Disk Cleanup, make sure that all of your files and settings are in Windows 7 where you expect them to be.
Deleting the Windows.old folder can’t be undone.
1.Open Disk Cleanup by clicking the Start button. In the search box, type Disk Cleanup, and then, in the list of results, click Disk Cleanup.
If you're prompted to choose a drive, click the drive you installed Windows on, and then click OK.
2.In the Disk Cleanup dialog box, on the Disk Cleanup tab, click Clean up system files.
If you're again prompted to choose a drive, click the drive you just installed Windows on, and then click OK.
3.Select the Previous Windows installation(s) check box, and any other check boxes for the files you want to delete, and then click OK.
4. In the message that appears, click Delete Files.
5. Reboot if required, and you are finished.
Personally - I use Disk Cleanup once every month.